China start-ups: Overtime

Three Chinese unicorns – Momenta, Yitu Technology and ByteDance Technology – recently appeared on the same list, but it wasn’t a ranking of their capital-raising capabilities. Rather, they were outed for adopting the so-called “996” work schedule, whereby employees are required to work 9 a.m. to 9 p.m., six days a week.

Coined by disgruntled Chinese tech workers around 2014, the term has risen to prominence this year after a group of coders took to Github to name and shame companies they believe have either institutionalized or quietly enforced the practice. It comes as a slowing economy and sluggish capital markets have taken their toll on Chinese start-ups: even the idea of completing a listing within three year and becoming a millionaire overnight – a common aspiration – is not so easily conceived. Workers feel under pressure but unrewarded. Little wonder they are complaining about working hours.

“The last two years have been tough. Tech professionals still put in a huge effort, but the results aren’t as immediate as before. Complaints about 996 can be interpreted as exhausted workers letting off steam,” says Weiming Xiong, a partner at China Growth Capital.

Most investors shrug off concerns about working hours with similar explanations, but this hasn’t stopped questions being asked about the sustainability of these practices. China’s younger generations are not cut from the same cloth as their parents. An individual born in or after the 1990s tends to place a higher priority on quality of life and is therefore reluctant to follow a grueling work schedule. Start-ups need to keep tabs on these trends.

“Eventually, 996 will fade away. Older tech sector workers will eventually want to spend more time with their families, while the younger ones don’t want to work as hard as the generations before them. Most of us just see it a temporary sacrifice,” says Vivian Deng, a Shenzhen-based entrepreneur who has a start-up that provides psychological consultations.

Hard yards

Intense work schedules have long been part of start-up culture globally. Stories of programmers embarking on protracted, caffeine-fueled coding sessions and teams participating in coordinated sprints as they ready products for market are readily told in Silicon Valley. It is unclear when this took hold in China as well, but the success of the first generation of start-ups inspired countless more entrepreneurs and the influx of VC investors meant there was plenty of capital to fuel the pursuit of their dreams.

Several industry participants say 996 emerged around 2011 and rising competition precipitated its wider adoption. Even those early success stories – Baidu, Alibaba Group and Tencent Holdings – still operate under a 996 schedule. In some cases, it is 995. Alibaba’s Jack Ma has defended the practice, saying that longer hours are a “huge blessing” for employees.

“What happens in China is companies like Alibaba and Tencent, after they become large businesses, don’t abandon the hardworking start-up culture. For instance, Tencent structures its departments as thousands of small start-ups,” says William Bao Bean, a China-based partner at SOSV, a multi-stage accelerator.

For companies further down the food chain, the hours are often even longer as they strive to achieve performance milestones agreed with investors. A former executive at Baidu’s mobile unit who now runs an artificial reality start-up jokes that people work on a “007” basis – 12 a.m. to 12 a.m., seven days a week. 

These schedules do not constitute official policy. Rather, the practice is quietly enforced, if it is necessary to enforce at all. Staff often don’t want to be perceived as reluctant to take on projects, regardless of how many hours it will take to complete them, because they fear of being sidelined by younger, hungrier colleagues. 

There is plenty of anecdotal evidence of low productivity, unhappiness and health troubles among employees who push themselves too hard. Horror stories bleed into the public domain. These include the death of a 36-year-old male IT technician working for a telecommunications company in Shenzhen in 2015, after he got little or no sleep for several consecutive days. The technician’s last remark to his mother was “I am way too tired,” according to CCTV News.

A proportional response?

While concerns about the potential negative consequences of 996 have provoked widespread debate in China, investors and entrepreneurs are unequivocal in their responses: this is the nature of start-up ecosystems worldwide and people should be aware of what they are signing up for. Some go so far as to interpret a failure to observe 996 as a warning sign. 

“If we see people leaving at 6 p.m. sharp, we might think we were wrong to back the company. Just like someone would want to spend every single minute with their lover, employees and founders need to be excited by their ideas and products – to the point that they naturally want to spend more time improving them,” says Xiong of China Growth Capital. 

At the same time, Xiong and others advocate start-ups taking time to reflect if complaints about 996 do arise. Disgruntled employees may not only be detrimental to the performance of the company, but their negative feedback spreads fast, which could make it harder to recruit quality people in the future. Solutions range from improving the working environment or cutting down on timewasting.

It is also important to have communication from management as to the goals for the company and the individual. “Talking about these goals on a regular basis ensures that everyone in the company knows what everyone else is doing,” says Bean of SOSV. “Then they don’t have to be too concerned with how much facetime they have with employees.”

Moreover, certain global tech companies are known for compensating those who work long hours with more than just salary. Free meals, childcare facilities, gyms and even napping space are necessary, some industry participants claim. Younger start-ups probably likely cannot match these perks, but they can offer leeway as to when and where people work.

“In my company, employees can take work home and finish it there,” explains Deng. “We have adopted a very flexible attitude towards the work schedule.”   

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• Topics
• Greater China
• Technology
• GPs
• China
• China Growth Capital
• Venture
• seed